January 21, 2022 | Grantham: Asset Super Bubbles Imploding, Prices Heading Down To Mean

We interrupt the mayhem in global asset markets for some rare and valuable context,  see Jeremy Grantham doubles down on crash call, says sell-off has started:

In a note posted Thursday, Grantham, the co-founder of Boston asset manager GMO, describes U.S. stocks as being in a “super bubble,” only the fourth of the past century. And just as they did in the crash of 1929, the dot-com bust of 2000 and the financial crisis of 2008, he’s certain this bubble will burst, sending indexes back to statistical norms and possibly further.

That, he said, involves the S&P 500 dropping some 45% from Wednesday’s close — and 48% from its Jan. 4 peak — to a level of 2500. The Nasdaq Composite, already down 8.3% this month, may sustain an even bigger correction.

Grantham’s latest 12-page public service announcement can be read here: Let the Wild Rumpus Begin.  He also discussed the analysis on Bloomberg this week, but the full segment video is not yet posted.  The snippet below is their teaser.

Grantham detailed his call for a crash in the S&P 500 and  explains why central bank efforts to prevent a major selloff are unlikely to succeed. He spoke exclusively to Bloomberg’s Erik Schatzker on Bloomberg’s “Front Row.” Here is a direct video link.

Danielle Park January 21st, 2022

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